The blog of the Alliance for American Manufacturing

American Steelmakers Say China is Dodging Tariffs by Sending Steel Through Vietnam

U.S. Steel, ArcelorMittal and others filing complaints; the United Steelworkers back the effort.

U.S. steelmakers say Chinese steel companies are purposely avoiding U.S. import tariffs by routing their shipments through Vietnam – and they want the Commerce Department to take action to stop it.

U.S. Steel, ArcelorMittal, Nucor Corp., and AK Steel plan to file petitions today and Monday with Commerce, which will have 45 days to decide whether to take up the cases. If Commerce eventually finds that China is evading U.S. tariffs, it could expand tariffs on steel that originates in China but is shipped through Vietnam.

The Commerce Department repeatedly has found that China is dumping its steel into the U.S. market, and has issued several sets of anti-dumping and countervailing duties on steel imports from China. But these new cases move the issue into new territory.

And as the Wall Street Journal reported on Friday, the American steel companies appear to have a pretty strong case:

"Independent trade data appear to lend credence to the steelmaker claims. In the first six months of 2016, shipments of steel from Vietnam to the U.S. increased to 312,329 tons, from 25,756 tons. Over the same period, Chinese exports of steel to Vietnam rose 46% to 6.3 million tons from 4.3 million tons, according to data firm Global Trade Information Services."

Duty evasion takes place quite often. A recent report from the Government Accountability Office found that $2.3 billion in import duties from 2001 to 2014 went unpaid.

The International Trade Commission, aware that such circumvention is taking place, unveiled a new tool last month that is designed to make it easier to analyze surging imports, including by determining their country of origin and tracking their journey to the United States.

United Steelworkers President Leo Gerard said the union is supporting the cases, noting that “foreign competitors are using every means available” to dodge import duties.

"The recent antidumping and countervailing duty cases have been vital to stabilizing our market and helping to restore fair pricing for many products. Tens of thousands of jobs have been saved," he said. "The fight, however, is almost endless as competitors seek new ways to skirt the rules. Today’s case looks to close down yet another path being used to attack our market."

But Gerard also noted that the filings are just another small step in a much bigger battle.

"Enforcing our nation’s trade laws is comparable to the carnival game of ‘whack a mole,’ and these filing[s] are us whacking that mole," Gerard said. "Government needs to do much more to relieve that burden and send an unequivocal message that breaking rules will be met with swift and sure responses."

About 19,000 steelworkers across the country have faced layoffs and dozens of steel facilities have closed because of the ongoing steel imports crisis, according to the United Steelworkers.